EXHIBIT 1.1
1ST COLONIAL BANCORP
(a New Jersey corporation)
600,000 Shares of Common Stock
UNDERWRITING AGREEMENT
This Underwriting Agreement is made and entered into this
[___] day of [April], 2004 by and between 1st Colonial Bancorp, a Pennsylvania
corporation (the "Company") and Xxxx Xxxx & Co., Inc. (the "Underwriter"). The
Company hereby confirms its agreement with the Underwriter with respect to the
issue and sale by the Company and the purchase by the Underwriter of
approximately 600,000 shares of the Company's Common Stock, no par value per
share ("Common Stock") (the "Initial Shares"). The Company also proposes to
issue and sell to the Underwriter, at the Underwriter's option, up to an
additional [90,000 shares of Common Stock (the "Option Shares") as set forth
herein. The term "Shares" as used herein, unless indicated otherwise, shall mean
the Initial Shares and the Option Shares.
The initial public offering price for the Shares, the purchase
price to be paid by the Underwriter for the Shares, and the number of Shares to
be sold to the Underwriter by the Company shall be agreed upon by the Company
and the Underwriter, and such agreement shall be set forth in a separate written
instrument substantially in the form of EXHIBIT A hereto (the "Price
Agreement"). The Price Agreement may take the form of an exchange of any
standard form of written telecommunication between the Company and the
Underwriter and shall specify such applicable information as is indicated in
EXHIBIT A hereto. The offering of the Shares will be governed by this Agreement,
as supplemented by the Price Agreement. From and after the date of the execution
and delivery of the Price Agreement, this Agreement shall be deemed to
incorporate, and all references herein to "this Agreement" shall be deemed to
include, the Price Agreement.
The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form SB-2
(File No. [333-113779) covering the registration of the Shares under the
Securities Act of 1933, as amended (the "1933 Act"), including the related
preliminary prospectus or prospectuses, and an amendment to such registration
statement, including a revised prospectus. Each prospectus used for the offer of
the Shares before the time such registration statement becomes effective is
herein called a "preliminary prospectus." Such registration statement, at the
time it becomes effective, is herein called the "Registration Statement," and
the prospectus used for the offer and sale of the Shares included in the
Registration Statement at the time it becomes effective is herein called the
"Prospectus," except that, if any revised prospectus provided to the Underwriter
by the Company for use in connection with the offering of the Shares differs
from the prospectus included in the Registration Statement at the time it
becomes effective (whether or not such prospectus is required to be filed
pursuant to Rule 424(b) under the 1933 Act ("Rule 424(b)"), the term
"Prospectus" shall refer to such revised prospectus from and after the time it
is first furnished to the Underwriter for such use.
The Company understands that the Underwriter proposes to make
a public offering
of the Shares (the "Offering") as soon as possible after the Registration
Statement becomes effective. The Underwriter may assemble and manage a selling
group of broker-dealers that are members of the National Association of
Securities Dealers, Inc. ("NASD") to participate in the solicitation of purchase
orders for the Shares.
Section 1. Representations and Warranties.
(a) The Company represents and warrants to and agrees
with the Underwriter that:
(i) The Company meets the requirements for use of Form
SB-2 under the 1933 Act and, when the Registration Statement on such
form shall become effective and at all times subsequent thereto up to
the Closing Time referred to below (and, with respect to the Option
Shares, up to the Option Closing Date referred to below), (A) the
Registration Statement and any amendments and supplements thereto will
comply in all material respects with the requirements of the 1933 Act
and the rules and regulations of the Commission under the 1933 Act (the
"1933 Act Regulations"); (B) neither the Registration Statement nor any
amendment or supplement thereto will contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and (C)
neither the Prospectus nor any amendment or supplement thereto will
include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading,
except that this representation and warranty does not apply to
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by the Underwriter
expressly for use in the Registration Statement or the Prospectus. The
statements contained under the caption "Underwriting" in the Prospectus
constitute the only information furnished to the Company in writing by
the Underwriter expressly for use in the Registration Statement or the
Prospectus.
(ii) Documents previously filed by the Company with the
Commission pursuant to Section 15(d) of the Securities Exchange Act of
1934, as amended (the "1934 Act") complied in all material respects
with the requirements of the Exchange Act and the rules and regulations
of the Commission thereunder (the "1934 Act Regulations") and did not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to
make the statements therein not misleading.
(iii) KPMG LLP ("KPMG"), which is reporting upon the
audited financial statements included or incorporated by reference in
the Registration Statement, has advised the Company that it is an
independent certified public accountant as required by the 1933 Act and
the 1933 Act Regulations and within the meaning of the Code of Ethics
of the American Institute of Certified Public Accountants ("AICPA") and
as defined under regulations of the Commission promulgated under the
1933 Act, is registered with the Public Company Accounting Oversight
Board ("PCAOB") as required by Section 102 of the Sarbanes Oxley Act of
2002 (the "Sarbanes Oxley Act") and KPMG is, with
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respect to the Company and each of its subsidiaries, independent
certified public accountants.
(iv) The consolidated financial statements, audited and,
if any, unaudited (including the notes thereto), included or
incorporated by reference in the Registration Statement present fairly
the consolidated financial position of the Company and its subsidiaries
as of the dates indicated and the consolidated results of operations
and cash flows of the Company and its subsidiaries for the periods
specified. Such financial statements have been prepared in conformity
with generally accepted accounting principles applied on a consistent
basis throughout the periods involved, except as otherwise stated
therein. The financial statement schedules, if any, included in the
Registration Statement present fairly the information required to be
stated therein. The selected financial and statistical data included in
the Prospectus under the heading "Summary Financial and Other Data" are
accurate in all material respects and present fairly, on the basis set
forth in the Prospectus, the information shown therein. The pro forma
consolidated financial data of the Company included in the Registration
Statement have been prepared and compiled in all material respects on
the pro forma basis described therein, and the pro forma adjustments
have in all material respects have been properly and fairly applied to
the audited and, if any, unaudited consolidated financial statements to
which they relate included in the Registration Statement.
(v) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Pennsylvania with corporate power and authority under such laws to own,
lease and operate its properties and conduct its business as described
in the Prospectus. Each direct and indirect subsidiary of the Company
is an entity duly organized, validly existing and in good standing
under the laws of its respective jurisdiction of organization with
corporate power and authority under such laws to own, lease and operate
its properties and conduct its business. The Company and each of its
direct and indirect subsidiaries is duly qualified to transact business
as a foreign corporation and is in good standing in each other
jurisdiction in which it owns or leases property of a nature, or
transacts business of a type, that would make such qualification
necessary, except to the extent that the failure to so qualify or be in
good standing would not have a material adverse effect on the financial
condition , earnings, assets or business prospects of the Company and
its subsidiaries, considered as one enterprise.
(vi) The Company is duly registered with the Board of
Governors of the Federal Reserve System as a bank holding company under
the Bank Holding Company Act of 1956, as amended. 1st Colonial National
Bank (the "Bank") is a commercial bank chartered under the National
Bank Act by the Comptroller of the Currency; and the deposit accounts
of the Bank are insured by the Bank Insurance Fund of the Federal
Deposit Insurance Corporation (the "FDIC") up to the maximum allowable
limits thereof. The Company has all such power, authority,
authorization, approvals and orders as may be required to enter into
this Agreement, to carry out the provisions and conditions hereof and
thereof and to issue and sell the Shares.
(vii) All of the outstanding shares of capital stock of the
Bank and each of the
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Company's other subsidiaries have been duly authorized and validly
issued and are fully paid and, except as provided in 12 U.S.C. Section
55, non-assessable and are owned by the Company directly or indirectly,
free and clear of any pledge, lien, security interest, charge, claim,
equity or encumbrance of any kind.
(viii) Other than the Bank, the Company does not have any
"significant subsidiaries" as defined in Rule 1-02 of Regulation S-X of
the Commission. The Bank does not have any "significant subsidiaries"
as defined in Rule 1-02 of Regulation S-X of the Commission.
(ix) The Company had, at the date indicated in the
Prospectus under the caption "Capitalization," the duly authorized and
outstanding capitalization set forth under such caption.
(x) This Agreement has been duly authorized, executed and
delivered by the Company and, when duly executed by the Underwriter,
will constitute the valid and binding agreement of the Company
enforceable against the Company in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable
principles.
(xi) The Shares have been duly and validly authorized by
the Company for issuance and sale to the Underwriter pursuant to this
Agreement and, when issued and delivered by the Company to the
Underwriter pursuant to this Agreement against payment of the
consideration set forth herein, will be validly issued, fully paid and
non-assessable. The Shares conform in all material respects to the
description thereof in the Prospectus, and such description conforms in
all material respects to the rights set forth in the instruments
defining the same; the holders of the Shares will be entitled to the
same limitation of personal liability extended to shareholders of
corporations organized under the Business Corporation Law of the
Commonwealth of Pennsylvania; and the issuance of the Shares is not
subject to any preemptive or other similar rights.
(xii) Except for information provided in writing to the
Company by the Underwriter about the Underwriter for use in the
Prospectus, the Company has not relied upon the Underwriter or its
legal or other advisors for any legal, tax or accounting advice.
(xiii) The issuance and sale of the Shares by the Company,
the compliance by the Company with all of the provisions of this
Agreement, and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, any statute or
any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company or any of its properties; and
no consent, approval, authorization, order, license, certificate,
permit, registration or qualification of or with any such court or
other governmental agency or body is required to be obtained by the
Company for the issue and sale of the Shares by the Company, or the
consummation by the Company of the transactions contemplated by this
Agreement, except for such consents, approvals, authorizations,
licenses, certificates, permits, registrations or qualifications as
have
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already been obtained, or as may be required under the 1933 Act or the
1933 Act Regulations, the 1934 Act or the 1934 Act Regulations, or any
state securities laws.
(xiv) Each person who is an officer or director of the
Company or a director of the Bank, and each person having piggyback
registration rights pursuant to those certain common stock purchase
warrants issued by the Bank in June 2000, has signed an agreement
substantially in the form attached hereto as EXHIBIT B (the "Lock-up
Agreements"). The Company has provided to counsel for the Underwriter
true, accurate and complete copies of all such Lock-up Agreements. The
Company hereby represents and warrants that it will not release any of
its officers, directors or other shareholders from any Lock-up
Agreements currently existing or hereafter effected without the prior
written consent of the Underwriter.
(xv) The Company has not engaged in any activity that
would result in the Company being, and after giving effect to the
offering and sale of the Shares, the Company will not be, an
"investment company," or an entity "controlled" by an "investment
company," as such terms are defined in the Investment Company Act of
1940, as amended (the "Investment Company Act").
(xvi) All of the outstanding shares of capital stock of the
Company have been duly authorized and validly issued, are fully paid
and non-assessable, and are not subject to the preemptive rights of any
stockholder of the Company.
(xvii) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein, there has not been (A) any material adverse
change in the financial condition , earnings, assets or business
prospects of the Company and its subsidiaries, considered as one
enterprise, whether or not arising in the ordinary course of business,
(B) any transaction entered into by the Company or any subsidiary,
other than in the ordinary course of business, that is material to the
Company and its subsidiaries, considered as one enterprise, or (C) any
dividend or distribution of any kind declared, paid or made by the
Company on its capital stock. Neither the Company, the Bank nor any
other subsidiary has any material liability of any nature, contingent
or otherwise, that is required under the 1933 Act or the 1933 Act
Regulations to be set forth in the Prospectus and is not set forth
therein.
(xviii) Neither the Company, the Bank nor any other
subsidiary is in violation of any provision of its certificate of
incorporation, charter or bylaws or in default in the performance or
observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note,
lease or other agreement or instrument to which it is a party or by
which it may be bound or to which any of its respective properties may
be subject, except for such defaults that, individually or in the
aggregate, would not have a material adverse effect on the financial
condition , earnings, assets or business prospects of the Company and
its subsidiaries, considered as one enterprise.
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(xix) Except as disclosed in the Prospectus, there is no
action, suit or proceeding before or by any government, governmental
instrumentality or court, domestic or foreign, now pending or, to the
knowledge of the Company, threatened against the Company, the Bank or
any other subsidiary that is required to be disclosed in the Prospectus
or that could reasonably be expected to result in any material adverse
change in the financial condition , earnings, assets or business
prospects of the Company and its subsidiaries, considered as one
enterprise, or that could reasonably be expected materially and
adversely to affect the properties or assets of the Company and its
subsidiaries, considered as one enterprise, or that could reasonably be
expected materially and adversely to affect the consummation of the
transactions contemplated in this Agreement; all pending legal or
governmental proceedings to which the Company, the Bank or any other
subsidiary is a party that are not described in the Prospectus,
including ordinary routine litigation incidental to its business, if
decided in a manner adverse to the Company, would not have a material
adverse effect on the financial condition , earnings, or business
prospects of the Company and its subsidiaries, considered as one
enterprise.
(xx) There are no material contracts or documents of a
character required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
that are not described and filed as required.
(xxi) Each of the Company and its direct and indirect
subsidiaries, including the Bank, has good and marketable title to all
properties and assets described in the Prospectus as owned by it, free
and clear of all liens, charges, encumbrances or restrictions, except
such as (A) are described in the Prospectus or (B) are neither material
in amount nor materially significant in relation to the business of the
Company and its subsidiaries, considered as one enterprise; all of the
leases and subleases material to the business of the Company and its
subsidiaries, considered as one enterprise are in full force and
effect, and neither the Company, the Bank nor any other subsidiary has
any notice of any material claim that has been asserted by anyone
adverse to the rights of the Company, the Bank or any other subsidiary
under any such lease or sublease or affecting or questioning the rights
of such corporation to the continued possession of the leased or
subleased premises under any such lease or sublease.
(xxii) Each of the Company and its direct and indirect
subsidiaries, owns, possesses or has obtained all material governmental
licenses, permits, certificates, consents, orders, approvals and other
authorizations necessary to own or lease, as the case may be, and to
operate its properties and to carry on its business as presently
conducted, and neither the Company, the Bank nor any other subsidiary
has received any notice of any restriction upon, or any notice of
proceedings relating to revocation or modification of, any such
licenses, permits, certificates, consents, orders, approvals or
authorizations.
(xxiii) No labor problem with the employees of the Company,
the Bank or any other subsidiary exists or, to the best knowledge of
the Company, is imminent that could materially adversely affect the
financial condition , earnings, or business prospects of the Company
and its subsidiaries, considered as one enterprise, and the Company is
not aware of any existing or imminent labor disturbance by the
employees of any of its, the Bank's or any other subsidiary's principal
suppliers, contractors or customers that could
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reasonably be expected to materially adversely affect the financial
condition, earnings, or business prospects of the Company and its
subsidiaries, considered as one enterprise.
(xxiv) Except as disclosed in the Prospectus under the
caption "Description of Our Securities - Warrants," there are no
persons with registration or other similar rights to have any
securities of the Company registered pursuant to the Registration
Statement or otherwise registered by the Company under the 1933 Act.
(xxv) Except as disclosed in the Prospectus, the Company
and its direct and indirect subsidiaries, including the Bank, own or
possess all patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets or other unpatented and/or
unpatentable proprietary or confidential information systems or
procedures), trademarks, service marks and trade names (collectively,
"patent and proprietary rights") currently employed by them in
connection with the business now operated by them except where the
failure to own, possess or acquire such patent and proprietary rights
would not have a material adverse effect on the financial condition ,
earnings, assets or business prospects of the Company and its
subsidiaries, considered as one enterprise. Except as disclosed in the
Prospectus, neither the Company, the Bank nor any other subsidiary has
received any notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any patent or
proprietary rights, and which infringement or conflict (if the subject
of any unfavorable decision, rule and refinement, singly or in the
aggregate) could reasonably be expected to result in any material
adverse change in the financial condition , earnings, assets or
business prospects of the Company and its subsidiaries, considered as
one enterprise.
(xxvi) The Company and each subsidiary of the Company have
filed all federal, state and local income, franchise or other tax
returns required to be filed or have filed notices of permitted
extensions, and have made timely payments of all taxes due and payable
in respect of such returns, and no material deficiency has been
asserted with respect thereto by any taxing authority.
(xxvii) [intentionally omitted]
(xxviii) Neither the Company, the Bank nor any other
subsidiary of the Company has taken or will take, directly or
indirectly, any action designed to cause or result in, or which has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation, under the Exchange Act or otherwise, of
the price of the Shares or the Common Stock.
(xxix) Neither the Company, the Bank nor any other
subsidiary is or has been (by virtue of any action, omission to act,
contract to which it is a party or by which it is bound, or any
occurrence or state of facts whatsoever) in violation of any applicable
foreign, federal, state, municipal or local statutes, laws, ordinances,
rules, regulations and/or orders issued pursuant to foreign, federal,
state, municipal or local statutes, laws, ordinances, rules, or
regulations (including those relating to any aspect of banking, bank
holding companies, consumer credit, truth-in-lending, usury, currency
transaction reporting, the environment or hazardous or toxic substances
or wastes, pollutants or
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contaminants ("Environmental Laws"), occupational safety and health and
equal employment practices) heretofore or currently in effect, except
such violations that have been fully cured or satisfied without
recourse or that in the aggregate will not have a material adverse
effect on the financial condition , earnings, , assets or business
prospects of the Company and its subsidiaries, considered as one
enterprise.
(xxx) Neither the Company, the Bank, nor any other
subsidiary has any material costs or liabilities, individually or in
the aggregate, associated with Environmental Laws (including, without
limitation, any capital or operating expenditures required for
clean-up, closure of properties or compliance with Environmental Laws
or any permit, license or approval, any related constraints on
operating activities and any potential liabilities to third parties),
which would, in the aggregate, have a material adverse effect on the
financial condition, earnings, assets or business prospects of the
Company and its subsidiaries, considered as one enterprise.
(xxxi) Neither the Company, the Bank nor any other
subsidiary has any agreement or understanding with any person (A)
concerning the future acquisition by the Company or the Bank of a
controlling interest in any entity or (B) concerning the future
acquisition by any person of a controlling interest in the Company, the
Bank or any other subsidiary, in either case that is required by the
1933 Act or the 1933 Act Regulations to be disclosed by the Company
that is not disclosed in the Prospectus.
(b) Any certificate signed by any authorized officer of
the Company or the Bank and delivered to the Underwriter or to counsel for the
Underwriter pursuant to this Agreement shall be deemed a representation and
warranty by the Company to the Underwriter as to the matters covered thereby.
(c) The Underwriter represents and warrants to and agrees
with the Company that:
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(i) The Underwriter is registered as a broker-dealer with
the Commission and is a member of the NASD.
(ii) The Underwriter is validly existing and in good
standing as a corporation under the laws of the State of New Jersey
with corporate power and authority to provide the services to be
furnished to the Company hereunder.
(iii) The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated have been duly and
validly authorized by all necessary corporate action on the part of the
Underwriter, and this Agreement is a legal, valid and binding
obligation of the Underwriter, enforceable in accordance with its
terms, except as limited under applicable law and subject to
bankruptcy, insolvency, reorganization or other laws relating to or
affecting the enforcement of creditor's rights generally and equitable
principles limiting the right to obtain specific enforcement or similar
equitable relief.
(iv) The Underwriter and, to the Underwriter's knowledge,
its employees, and agents who shall perform any of the services
required hereunder to be performed by the Underwriter shall be duly
authorized and shall have all licenses, approvals and permits necessary
to perform such services.
(v) The execution and delivery of this Agreement by the
Underwriter, the fulfillment of the terms set forth herein and the
consummation of the transactions herein contemplated shall not violate
or conflict with the governing documents of the Underwriter or violate,
conflict with or constitute a breach of, or default (or any event
which, with notice or lapse of time, or both, would constitute a
default) under, any material agreement, indenture or other instrument
by which the Underwriter is bound or under any governmental license or
permit or any law, administrative regulation, authorization, approval
or order or court decree, injunction or order applicable to it.
(vi) There is not now pending nor, to the Underwriter's
knowledge, threatened against the Underwriter any material action or
proceeding before the Commission, the NASD, any state securities
commission or any state or federal court concerning the Underwriter's
activities as a broker-dealer.
Section 2. Sale and Delivery to the Underwriter; Closing.
(a) On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company agrees to sell to the Underwriter, and the Underwriter agrees to
purchase from the Company, the number of Initial Shares set forth at the
purchase price and terms set forth herein and in the Price Agreement.
In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company hereby grants an option to the Underwriter to purchase all or
a portion of the Option Shares in accordance with the terms set forth herein and
in the Price Agreement. The option hereby granted will expire at 5:00 p.m. on
the 30th day after the date the Registration Statement is declared effective by
the Commission (or at 5:00
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p.m. on the next business day following the 30th day if such 30th day is not a
business day) and may be exercised, solely for the purpose of covering
over-allotments which may be made in connection with the offering and
distribution of the Initial Shares upon notice by the Underwriter to the Company
setting forth the number of Option Shares as to which the Underwriter is
exercising the option and the time, date and place of payment and delivery for
the Option Shares. Such time and date of delivery (the "Option Closing Date")
shall be determined by the Underwriter but shall not be later than five full
business days after the exercise of said option, nor in any event prior to
Closing Time, as hereinafter defined, nor earlier than the second business day
after the date on which the notice of the exercise of the option shall have been
given.
(b) Payment of the purchase price for, and delivery of
certificates for the Initial Shares shall be made at such place as shall be
agreed upon by the Company and the Underwriter, at 9:30 a.m. on the third full
business day after the effective date of the Registration Statement, or at such
other time not earlier than three nor more than ten full business days
thereafter as the Underwriter and the Company shall determine (such date and
time of payment and delivery being herein called the "Closing Time"). In
addition, in the event that any or all of the Option Shares are purchased by the
Underwriter, payment of the purchase price for, and delivery of certificates
for, such Option Shares shall be made at such place as shall be agreed upon by
the Company and the Underwriter, on the Option Closing Date as specified in the
notice from the Underwriter to the Company. Payment for the Initial Shares and
the Option Shares, if any, shall be made to the Company by wire transfer of
immediately available funds, against delivery of certificates for the Initial
Shares and Option Shares, as the case may be, to the Underwriter.
(c) Certificates for the Initial Shares and Option
Shares, as the case may be, shall be registered in such name or names and in
such denominations as the Underwriter may request in writing at least two
business days prior to the Closing Time or the Option Closing Time, as the case
may be. The Company will make such certificates available for examination by the
Underwriter and counsel to the Underwriter not later than 10:00 a.m. Eastern
time on the business day prior to the Closing Time or the Option Closing Time,
as the case may be.
Section 3. Certain Covenants of the Company. The Company
covenants with the Underwriter as follows:
(a) The Company will use its best efforts to cause the
Registration Statement to become effective and will notify the Underwriter
immediately, and confirm the notice in writing, (i) when the Registration
Statement, or any post-effective amendment to the Registration Statement, shall
have become effective, or any supplement to the Prospectus or any amended
Prospectus shall have been filed, (ii) of the receipt of any comments from the
Commission, (iii) of any request of the Commission that the Company amend the
Registration Statement or amend or supplement the Prospectus or for additional
information and (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Shares for offering or sale in any
jurisdiction, or of the institution or threatening of any proceedings for any of
such purposes. The Company will use every commercially reasonable effort to
prevent the issuance of any such stop order or of any order preventing or
suspending such use and, if any such order is issued, to obtain the lifting
thereof at
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the earliest possible moment.
(b) The Company will not at any time file or make any
amendment to the Registration Statement or, if the Company has elected to rely
upon Rule 430A of the 1933 Act Regulations ("Rule 430A"), any amendment or
supplement to the Prospectus (including documents incorporated by reference into
the Registration Statement or the Prospectus) of which the Underwriter shall not
previously have been advised and furnished a copy, or to which the Underwriter
or counsel for the Underwriter shall reasonably object.
(c) The Company has furnished or will furnish to the
Underwriter as many signed and conformed copies of the Registration Statement as
originally filed and of each amendment thereto, whether filed before or after
the Registration Statement becomes effective, copies of all exhibits and
documents filed therewith and signed copies of all consents and certificates of
experts as the Underwriter may reasonably request.
(d) The Company will deliver or cause to be delivered to
the Underwriter, without charge, from time to time until the effective date of
the Registration Statement, as many copies of each preliminary prospectus as the
Underwriter may reasonably request, and the Company hereby consents to the use
of such copies for purposes permitted by the 1933 Act. The Company will deliver
or cause to be delivered to the Underwriter, without charge, as soon as the
Registration Statement shall have become effective (or, if the Company has
elected to rely upon Rule 430A, as soon as practicable after the Price Agreement
has been executed and delivered) and thereafter from time to time as requested
by the Underwriter during the period when the Prospectus is required to be
delivered under the 1933 Act, such number of copies of the Prospectus (as
supplemented or amended) as the Underwriter may reasonably request.
(e) The Company will comply to the best of its ability
with the 1933 Act and the 1933 Act Regulations, and the 1934 Act and the 1934
Act Regulations, so as to permit the completion of the distribution of the
Shares as contemplated in this Agreement and in the Prospectus. If, at any time
when a prospectus is required by the 1933 Act to be delivered in connection with
sales of the Shares, any event shall occur or condition exist as a result of
which it is necessary, in the reasonable opinion of counsel for the Underwriter
or counsel for the Company, to amend the Registration Statement or amend or
supplement the Prospectus in order that the Prospectus will not include an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading, in light of the
circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the reasonable opinion of either such counsel, at any
such time to amend the Registration Statement or amend or supplement the
Prospectus in order to comply with the requirements of the 1933 Act or the 1933
Act Regulations, the Company will promptly prepare and file with the Commission,
subject to Section 3(b) hereof, such amendment or supplement as may be necessary
to correct such untrue statement or omission or to make the Registration
Statement or the Prospectus comply with such requirements.
(f) The Company will use its best efforts, in cooperation
with the Underwriter, to qualify the Shares for offering and sale under the
applicable securities laws of such states and other jurisdictions as the
Underwriter may designate and to maintain such qualifications in effect for a
period of not less than one year from the effective date of the
-11-
Registration Statement; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. The
Company will file such statements and reports as may be required by the laws of
each jurisdiction in which the Shares have been qualified as above provided.
(g) The Company will make generally available, within the
meaning of Rule 158 of the 1933 Act Regulations ("Rule 158"), to the holders of
the Shares and the Underwriter as soon as practicable, but not later than 90
days after the close of the period covered thereby, an earnings statement of the
Company and its subsidiaries (in form complying with the provisions of Rule 158)
covering a period of at least 12 months beginning after the effective date of
the Registration Statement but not later than the first day of the Company's
fiscal quarter next following such effective date.
(h) The Company and the Bank will use the net proceeds
received by them from the sale of the Shares in the manner specified in the
Prospectus under the caption "Use of Proceeds."
(i) For a period of at least five (5) years after the
Closing Time, the Company will not suspend its filing obligations under Section
15(d) of the Exchange Act, unless such suspension is undertaken in connection
with registration of the Company's equity securities under Section 12(b) or
Section 12(g) of the Exchange Act.
(j) For a period of five years after the Closing Time,
the Company will furnish to the Underwriter:
(i) at the request of the Underwriter, copies of all
annual reports, quarterly reports and current reports filed by the
Company with the Commission,
(ii) at the time furnished by the Company to its
shareholders, such other documents, reports, proxy statements and
information as shall be furnished by the Company to its shareholders
generally, and
(iii) such other public information concerning the Bank or
the Company as the Underwriter may reasonably request.
(k) The Company will provide to the holders of the Common
Stock annual reports containing financial statements audited by the Company's
independent auditors and, upon written request of such holders, the Company's
annual reports on Form 10-K.
(l) [intentionally omitted]
(m) The Company shall cause to be prepared, at its
expense and by counsel acceptable to the Underwriter, one or more "blue sky"
surveys (each, a "Blue Sky Survey") for use in connection with the offering of
the Shares as contemplated by the Prospectus and a copy of each Blue Sky Survey
or surveys shall be delivered to each of the Company and the Underwriter.
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(n) If, at the time the Registration Statement becomes
effective, any information shall have been omitted therefrom in reliance upon
Rule 430A, then the Company will prepare, and file or transmit for filing with
the Commission in accordance with Rule 430A and Rule 424(b), copies of an
amended Prospectus or, if required by Rule 430A, a post-effective amendment to
the Registration Statement (including an amended Prospectus) containing all
information so omitted.
(o) The Company will, at its expense, subsequent to the
issuance of the Shares, prepare and distribute to the Underwriter and counsel to
the Underwriter a bound volume or compact disc containing copies of the
documents used in connection with the issuance of the Shares.
(p) The Company will not, prior to the Option Closing
Date or thirty (30) days after the date of this Agreement, whichever occurs
first, incur any material liability or obligation (direct or contingent) or
enter into any material transaction, other than liabilities, obligations or
transactions incurred or entered into in the ordinary course of business, or any
transaction with a related party which is required to be disclosed in the
Prospectus pursuant to Item 404 of Regulation S-K of the Commission, except as
contemplated by the Prospectus.
(q) The Company will not sell or issue, contract to sell
or issue, or otherwise dispose of, for a period of 180 days after the Closing
Time, without the prior written consent of the Underwriter, any shares of, or
any securities convertible into or exercisable for shares of, Common Stock other
than in connection with any plan or arrangement (including stock options and
outstanding warrants) described in the Prospectus. The foregoing sentence shall
not apply to (A) the Shares to be sold hereunder or (B) the issuance by the
Company of shares of Common Stock upon the exercise of an option or a warrant
outstanding on the date hereof or (C) the issuance by the Company of options to
purchase shares of Common Stock, and the issuance of shares upon the exercise of
such options, that are eligible for issuance under their respective stock option
plans on the Closing Date.
Section 4. Payment of Expenses.
(a) Whether or not the sale of the Shares by the Company
is consummated, the Company agrees to pay or cause to be paid all expenses
incident to the performance of the obligations of the Company under this
Agreement, including the following: (i) the preparation, printing, issuance and
delivery of the certificates evidencing the Common Stock; (ii) the fees and
disbursements of the Company's counsel, accountants and other advisors; (iii)
the qualification or exemption from qualification of the Shares under all
applicable securities or Blue Sky laws, including filing fees and the reasonable
fees and disbursements of counsel in connection therewith and in connection with
the preparation of the Blue Sky Survey concerning such jurisdictions as the
Underwriter may reasonably designate; (iv) the printing and delivery to the
Underwriter in such quantities as the Underwriter shall reasonably request
copies of the Prospectus, and all other documents in connection with this
Agreement; (v) the filing fees incurred in connection with the review of the
Offering by the NASD; ; (vi) the fees and expenses relating to advertising
expenses, investor meeting expenses and other miscellaneous expenses relating to
the marketing by the Underwriter of the Shares; and (vii) the fees and charges
of any transfer agent, registrar or other agent. In the event that the
Underwriter incurs any such
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expenses on behalf of and with the prior written approval of the Company, the
Company will pay or reimburse the Underwriter for such expenses regardless of
whether the Offering is successfully completed, and such reimbursements will not
be included in the expense limitations set forth in the following paragraph.
(b) In addition, the Company will reimburse the Underwriter
for all reasonable out-of- pocket expenses, including legal fees and expenses of
Underwriter's counsel, incurred by the Underwriter in connection with the
services provided by the Underwriter to the Company pursuant to this Agreement.
Such legal fees shall not exceed (i) $50,000 plus out of pocket expenses with
regard to the Offering (excluding any Blue Sky fees and expenses), (ii) and
$10,000 with regard to the Underwriter's other out-of-pocket expenses without
the written approval of the Company. The Underwriter will provide a detailed
accounting of the out-of-pocket expenses referred to in this paragraph, which
will be paid by the Company on the Closing Time.
(c) If (i) the Closing Time does not occur on or before
[_______], 2004, (ii) the Company abandons or terminates the Offering, or (iii)
this Agreement is terminated by the Underwriter in accordance with the
provisions of Section 5 or 9(a), the Company shall reimburse the Underwriter for
its reasonable out-of-pocket expenses, as set forth in this Section 4, including
the reasonable fees and disbursements of counsel for the Underwriter incurred
prior to the date of such abandonment or termination.
Section 5. Conditions of Underwriter's Obligations. The
obligations of the Underwriter to purchase and pay for the Shares that it has
agreed to purchase pursuant to this Agreement are subject, in the discretion of
the Underwriter, [See (c )(v) below], to the execution of the Price Agreement
by the Underwriter (in the Underwriter's sole discretion), [see (c )(iv) below]
and to the following further conditions:
(a) The Registration Statement shall have become
effective on the date hereof, or on such later date as the Underwriter may agree
to in writing; at the Closing Time, no stop order suspending the effectiveness
of the Registration Statement shall have been issued under the 1933 Act and no
proceedings for that purpose shall be pending or, to the Underwriter's knowledge
or the knowledge of the Company, shall be contemplated by the Commission, and
any request on the part of the Commission for additional information shall have
been complied with. If the Company has elected to rely upon Rule 430A, a
prospectus containing the information required by Rule 430A shall have been
filed with the Commission in accordance with Rule 424(b) (or a post-effective
amendment providing such information shall have been filed and declared
effective in accordance with the requirements of Rule 430A).
(b) At the Closing Time, the Underwriter shall have
received:
(i) The opinion, dated as of the Closing Time, of Xxxxxxx
& Xxx P.C. ("Xxxxxxx & Xxx"), counsel for the Company, in form and
substance reasonably satisfactory to counsel for the Underwriter,
substantially in the form set forth in EXHIBIT C.
(ii) The opinion, dated as of the Closing Time, of Xxxxxxx
Xxxx Xxxx &
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Xxxxxxxxxx, LLP ("Xxxxxxx") counsel for the Underwriter, in form and
substance satisfactory to the Underwriter.
In rendering their opinion, counsel may rely, to the extent
such counsel deems such reliance necessary or appropriate, upon certificates of
governmental officials, certificates or opinions of other counsel reasonably
satisfactory to the Underwriter and, as to matters of fact, officers'
certificates. The opinion of such counsel need refer only to matters of
Pennsylvania, New Jersey and federal law and may add other qualifications and
explanations of the basis of their opinion as may be reasonably acceptable to
the Underwriter.
(c) At the Closing Time and again at the Option Closing
Date, (i) the Registration Statement and the Prospectus, as they may then be
amended or supplemented, shall contain all statements that are required to be
stated therein under the 1933 Act and the 1933 Act Regulations and shall conform
in all material respects to the requirements of the 1933 Act and the 1933 Act
Regulations, the Company shall have complied in all material respects with Rule
430A (if it shall have elected to rely thereon), and neither the Registration
Statement nor the Prospectus, as they may then be amended or supplemented, shall
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; (ii) there shall not have been, since the respective dates as of
which information is given in the Registration Statement, any material adverse
change in the financial condition , earnings, assets or business prospects of
the Company and its subsidiaries, considered as one enterprise, whether or not
arising in the ordinary course of business; (iii) no action, suit or proceeding
at law or in equity shall be pending or, to the knowledge of the Company,
threatened against the Company or its subsidiaries that would be required to be
set forth in the Prospectus that is not set forth therein, and no proceedings
shall be pending or, to the knowledge of the Company, threatened against either
of the Company or any subsidiary of the Company before or by any federal, state
or other commission, board or administrative agency wherein an unfavorable
decision, ruling or finding would materially adversely affect the financial
condition , earnings, , assets or business prospects of the Company and its
subsidiaries, considered as one enterprise, other than as set forth in the
Prospectus; (iv) the Company shall have complied, in all material respects, with
all agreements and satisfied all conditions on its part to be performed or
satisfied under this Agreement at or prior to the Closing Time or Option Closing
Date, as applicable; (v) the representations and warranties of the Company set
forth in Section l(a) hereof shall be accurate in all material respects as
though expressly made at and as of the Closing Time or Option Closing Date, as
applicable; and (vi) no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceeding for that purpose
been initiated or, to the best knowledge of the Company, threatened by the
Commission. At the Closing Time, the Underwriter shall have received a
certificate of the President and the Chief Financial Officer of the Company,
dated as of the Closing Time, to such effect.
(d) At the time that this Agreement is executed by the
Company, the Underwriter shall have received from KPMG a letter or letters,
dated such date, in form and substance satisfactory to the Underwriter,
confirming that they are independent certified public accountants with respect
to the Company within the meaning of the 1933 Act and the 1933 Act Regulations
and that KPMG is registered with PCAOB as required by Section 102 of the
Sarbanes Oxley Act, and stating in effect that, with respect to the Company:
-15-
(i) in their opinion, the consolidated financial
statements as of December 31, 2003 and 2002, and for each of the years
in the two year period ended December 31, 2003 and the related
financial statement schedules, if any, included or incorporated by
reference in the Registration Statement and the Prospectus and covered
by their opinions included therein comply as to form in all material
respects with the applicable accounting requirements of the 1933 Act
and the 1933 Act Regulations;
(ii) on the basis of procedures (but not an audit in
accordance with generally accepted accounting standards) specified by
the AICPA for a review of interim financial information as described in
SAS No. 71, Interim Financial Information, including a reading of the
latest available interim consolidated financial statements of the
Company, a reading of the minutes of all meetings of the Board of
Directors of the Company and the Bank and of the Audit and Executive
Committees of the Board of Directors of the Bank since January 1, 2004,
inquiries of certain officials of the Company and its subsidiaries
responsible for financial and accounting matters, and such other
inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) the unaudited interim consolidated financial
information included or incorporated by reference in the
Prospectus, if any, do not comply as to form in all material
respects with applicable accounting requirements of the 1933
Act, or are not presented in conformity with generally
accepted accounting principles applied on a basis consistent
with that of the audited financial statements included in the
Prospectus;
(B) at a specified date not more than three days
prior to the date of this Agreement, there was any increase in
total borrowings, or real estate owned of the Company and its
consolidated subsidiaries or any decrease in total assets,
total deposits or shareholders' equity of the Company and its
consolidated subsidiaries, any increase in the number of
outstanding shares of capital stock of the Company and its
consolidated subsidiaries or any increase or decrease in the
allowance for loan losses of the Company and its consolidated
subsidiaries, in each case as compared with amounts shown in
the financial statements at December 31, 2003 included in the
Registration Statement, except in all cases for changes,
increases or decreases that the Registration Statement
discloses have occurred or may occur; or
(C) for the period from December 31, 2003 to a
specified date not more than three days prior to the date of
this Agreement, there was any decrease in consolidated net
interest income, non-interest income, net income or net income
per share or any increase in the consolidated provision for
loan losses, in each case as compared with a period of
comparable length in the preceding year, except in all cases
for changes, increases or decreases that the Registration
Statement discloses have occurred or may occur; and
(iii) in addition to the procedures referred to in clause
(ii) above, they have performed other specified procedures, not
constituting an audit, with respect to certain
-16-
amounts, percentages, numerical data and financial information
appearing in the Registration Statement (including the Selected
Consolidated Financial Data) (having compared such items with, and have
found such items to be in agreement with, the financial statements of
the Company or general accounting records of the Company, as
applicable, which are subject to the Company's internal accounting
controls or other data and schedules prepared by the Company from such
records); and
(iv) on the basis of a review of schedules provided to
them by the Company, nothing came to their attention that caused them
to believe that the pro forma information set forth in the Prospectus
under the heading "Capitalization" had not been correctly calculated on
the basis described therein.
(e) At the Closing Time, the Underwriter shall have
received from KPMG a letter, in form and substance satisfactory to the
Underwriter and dated as of the Closing Time, reaffirming the statements made in
the letter(s) furnished pursuant to Section 5(d) hereof, except that the
inquiries specified in Section 5(d) hereof shall be made based upon the latest
available unaudited interim consolidated financial statements and the specified
date referred to shall be a date not more than five days prior to the Closing
Time.
(f) At the Closing Time, counsel for the Underwriter
shall have been furnished with all such documents, certificates and opinions as
they may reasonably request for the purpose of enabling them to pass upon the
issuance and sale of the Shares as contemplated in this Agreement and the
matters referred to in Section 5(c) hereof and in order to evidence the accuracy
and completeness of any of the representations, warranties or statements of the
Company, the performance of any of the covenants of the Company or the
fulfillment of any of the conditions herein contained; and all proceedings taken
by the Company at or prior to the Closing Time in connection with the
authorization, issuance and sale of the Shares as contemplated in this Agreement
shall be reasonably satisfactory in form and substance to the Underwriter and to
counsel for the Underwriter.
(g) The Company shall have paid, or made arrangements
satisfactory to the Underwriter for the payment of, all such expenses as may be
required by Section 4 hereof.
(h) The Shares shall have been qualified or registered
for sale, or subject to an available exemption from such qualification or
registration, under the "blue sky" or securities laws of such jurisdictions as
shall have been reasonably specified by the Underwriter, and the Offering
contemplated by this Agreement shall have been cleared by the NASD.
(i) The Lock-Up Agreements shall have been delivered to
the Underwriter.
(j) In the event the Underwriter exercises its option
provided in Section 2 hereof to purchase all or any portion of the Option
Shares, the obligations of the Underwriter to purchase the Option Shares that it
has agreed to purchase shall be subject to the receipt by the Underwriter on the
Option Closing Date of:
(i) A certificate, dated the Option Closing Date, of the
President and the Chief Financial Officer of the Company confirming
that the statements contained in the certificate delivered at the
Closing Time pursuant to Section 5(c) hereof remain true as of
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the Option Closing Date;
(ii) The favorable opinion of Xxxxxxx & Xxx, counsel for
the Company, addressed to the Underwriter and dated the Option Closing
Date, in form satisfactory to Xxxxxxx, counsel to the Underwriter,
relating to the Option Shares and otherwise to the same effect as the
opinion required by Section 5(b)(i) hereof;
(iii) The opinion of Xxxxxxx, counsel to the Underwriter,
dated the Option Closing Date, relating to the Option Shares and
otherwise to the same effect as the opinion required by Section
5(b)(ii) hereof;
(iv) A letter from KPMG addressed to the Underwriter and
dated the Option Closing Date, in form and substance satisfactory to
the Underwriter and substantially the same in form and substance as the
letter(s) furnished to the Underwriter pursuant to Section 5(e) hereof;
and
(v) Such other certificates, documents, opinions and
agreements as the Underwriter or its counsel reasonably require.
If any of the conditions specified in this Section 5 shall not
have been fulfilled when and as required by this Agreement, this Agreement may
be terminated by the Underwriter on notice to the Company at any time at or
prior to the Closing Time, and such termination shall be without liability of
any party to any other party, except as provided in Section 4 of this Agreement.
Notwithstanding any such termination, the provisions of Sections 4, 6, 7, 10 and
12 of this Agreement shall remain in effect.
Section 6. Indemnification.
(a) The Company agrees to indemnify and hold harmless the
Underwriter, each officer, director, employee, agent and legal counsel of the
Underwriter, and each person, if any, who controls the Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act, against
any loss, liability, claim, damage and expense whatsoever (which shall include,
but not be limited to, amounts incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim or investigation
whatsoever and any and all amounts paid in settlement of any claim or
litigation, provided such settlement is entered into with the consent of the
Company as provided herein), as and when incurred, arising out of, based upon or
in connection with (i) any untrue statement or alleged untrue statement of a
material fact or any omission or alleged omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, contained in (A) any preliminary prospectus, the Registration
Statement or the Prospectus (as from time to time amended and supplemented), or
any amendment or supplement thereto or in any document incorporated by reference
therein or required to be delivered with any preliminary prospectus or the
Prospectus or (B) in any application or other document or communication
(collectively called an "application") executed by or on behalf of the Company
or based upon written information furnished by or on behalf of the Company filed
in any jurisdiction in order to qualify the Shares under the "blue sky" or
securities laws thereof or filed with the Commission, the NASD or any securities
exchange, unless such statement or omission or alleged statement or omission was
-18-
made in reliance upon and in conformity with written information concerning the
Underwriter, this Agreement or the compensation of the Underwriter furnished to
the Company by or on behalf of the Underwriter expressly for inclusion in any
preliminary prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or in any application, as the case may be, or
(ii) any breach of any representation, warranty, covenant or agreement of the
Company contained in this Agreement. For purposes of this section, the term
"expense" shall include, but not be limited to, counsel fees and costs, court
costs, and other out-of-pocket costs. The indemnification provisions shall also
extend to all directors, officers, employees, agents, legal counsel and
controlling persons of each affiliate of the Underwriter.
(b) The Underwriter agrees to indemnify and hold harmless
the Company, its directors, each officer who signed the Registration Statement,
and each person, if any, who controls the Company within the meaning of Section
15 of the 1933 Act or Section 20(a) of the 1934 Act, against any and all loss,
liability, claim, damage and expense described in the indemnity contained in
subsection (a) above, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in any preliminary
prospectus, the Registration Statement or the Prospectus, or any amendment or
supplement thereto, or any application in reliance upon and in conformity with
written information about the Underwriter, this Agreement or the compensation of
the Underwriter, furnished to the Company by the Underwriter expressly for
inclusion in such preliminary prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or in any application.
(c) An indemnified party shall give prompt notice to each
indemnifying party if any action, suit, proceeding or investigation is commenced
in respect of which indemnity may be sought hereunder, but failure to notify an
indemnifying party shall not relieve the indemnifying party from its obligations
to indemnify hereunder, except to the extent that the indemnifying party has
been prejudiced in any material respect by such failure. If it so elects within
a reasonable time after receipt of such notice, an indemnifying party may assume
the defense of such action, including the employment of counsel satisfactory to
the indemnified parties and the payment of all expenses of the indemnified party
in connection with such action. Such indemnified party or parties shall have the
right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such indemnified party or
parties unless the employment of such counsel shall have been authorized in
writing by the indemnifying party in connection with the defense of such action
or the indemnifying party shall not have promptly employed counsel reasonably
satisfactory to such indemnified party or parties or such indemnified party or
parties shall have reasonably concluded that there may be one or more legal
defenses available to it or them or to other indemnified parties that are
materially different from or additional to those available to one or more of the
indemnifying parties, in any of which events such fees and expenses shall be
borne by the indemnifying party and the indemnifying party shall not have the
right to direct the defense of such action on behalf of the indemnified party or
parties. The Company shall be liable for any settlement of any claim against the
Underwriter (or any of its directors, officers, employees, agents, legal counsel
or controlling persons) made with the Company's written consent, which consent
shall not be unreasonably withheld. The Company shall not, without the written
consent of the Underwriter, settle or compromise any claim against the
Underwriter (or any of its directors, officers, employees, agents, legal counsel
or controlling persons) based upon circumstances giving rise to an
indemnification claim against the Company hereunder unless such settlement or
compromise
-19-
provides that the Underwriter and the other indemnified parties shall be
unconditionally and irrevocably released from all liability in respect to such
claim.
(d) In order to provide for just and equitable
contribution, if a claim for indemnification pursuant to these indemnification
provisions is made but it is found in a final judgment by a court that such
indemnification may not be enforced in such case, even though the express
provisions hereof provide for indemnification in such case, then the Company, on
the one hand, and the Underwriter, on the other hand, shall contribute to the
amount paid or payable by such indemnified persons as a result of such loss,
liability, claim, damage and expense (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company, on the one hand, and the
Underwriter, on the other hand, from the underwriting, or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company, on the one hand, and the
Underwriter, on the other hand, in connection with the statements, acts or
omissions which resulted in such loss, liability, claim, damage and expense, and
any other relevant equitable considerations. No person found liable for a
fraudulent misrepresentation or omission shall be entitled to contribution from
any person who is not also found liable for such fraudulent misrepresentation or
omission. Notwithstanding the foregoing, the Underwriter shall not be obligated
to contribute any amount hereunder that exceeds the amount of the underwriting
discount retained by them.
(e) The indemnity and contribution agreements contained
herein are in addition to any liability which the parties may otherwise have to
each other.
(f) Neither termination nor completion of the engagement
of the Underwriter nor any investigation made by or on behalf of the Underwriter
shall affect the indemnification obligations of the Company or the Underwriter
hereunder, which shall remain and continue to be operative and in full force and
effect.
Section 7. Representations, Warranties and Agreements to
Survive Delivery. The representations, warranties, indemnities, agreements and
other statements of the Company or its officers set forth in or made pursuant to
this Agreement will remain operative and in full force and effect regardless of
any investigation made by or on behalf of the Underwriter or any controlling
person of the Underwriter and will survive termination of this Agreement and
receipt or delivery of and payment for the Shares.
Section 8. Offering by the Underwriter. The Company is advised
by the Underwriter that the Underwriter proposes to make a public offering of
the Shares, on the terms and conditions set forth in the Registration Statement
from time to time as and when the Underwriter deems advisable after the
Registration Statement becomes effective.
Section 9. Termination of Agreement.
(a) The Underwriter may terminate this Agreement, by
notice to the Company, at any time at or prior to the Closing Time (i) if there
has been, since the time of execution of this Agreement or since the respective
dates as of which information is given in the Registration Statement, any
material adverse change in the financial condition , earnings, or
-20-
business prospects of the Company and its subsidiaries, considered as one
enterprise, whether or not arising in the ordinary course of business; or (ii)
if there has occurred any material adverse change in the financial markets of
the United States, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the reasonable judgment
of the Underwriter, impracticable or inadvisable to market the Shares or enforce
contracts for the sale of the Shares; or (iii) if trading in any securities of
the Company has been suspended or materially limited by the Commission or the
NASD, or if trading generally on The New York Stock Exchange, Nasdaq National
Market, Nasdaq SmallCap market or in the over-the-counter market has been
suspended or materially limited, or minimum or maximum prices for trading have
been fixed, or maximum ranges for prices for securities have been required, by
such exchange or system or by order of the Commission, the NASD or any other
governmental authority with appropriate jurisdiction over such matters, or a
material disruption has occurred in commercial banking or securities settlement
or clearance services in the United States; or (iv) if a banking moratorium has
been declared by any federal, New York or New Jersey authority; or (v) if there
shall have been such material and substantial change in the market for
securities in general or in political, financial or economic conditions as in
the Underwriter's reasonable judgment makes it inadvisable to proceed with the
offering, sale and delivery of the Shares on the terms contemplated by the
Prospectus; or (vi) if the Underwriter reasonably determines (which
determination shall be in good faith) that there has not been satisfactory
disclosure of all relevant financial information relating to the Company in the
Company's disclosure documents and that the sale of the Shares is inadvisable
given such disclosures; or (vii) if the Price Agreement has not been executed by
all the parties hereto by 5:30 p.m. New York time on the date hereof.
(b) If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party, except to the extent provided in Section 4 hereof. Notwithstanding any
such termination, the provisions of Sections 4, 6, 7, 10 and 12 hereof shall
remain in effect.
Section 10. Notices. All notices and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given if delivered, mailed or transmitted by any standard form of
telecommunication. Notices shall be addressed as follows:
If to the Underwriter:
Xxxx Xxxx & Co., Inc.
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxx X. Xxxxx, Managing Director
with a copy to:
Xxxxxxx Xxxx Xxxx & Xxxxxxxxxx, LLP
000 Xxxxxx Xxxxxx Xxxxx
Xxx Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
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If to the Company:
1st Colonial Bancorp
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, President and Chief
Executive Officer
with a copy to:
Xxxxxxx & Xxx
0000 Xxxxx 00 Xxxx, Xxxxx 000
Xxxxxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Section 11. Parties. This Agreement is made solely for the
benefit of the Underwriter, and the officers, directors, employees, agents and
legal counsel of the Underwriter specified in Section 6 hereof, the Company and,
to the extent expressed, any person controlling the Company or the Underwriter,
and the directors of the Company, its officers who have signed the Registration
Statement, and their respective executors, administrators, successors and
assigns, and no other person shall acquire or have any right under or by virtue
of this Agreement. The term "successors and assigns" shall not include any
purchaser, as such purchaser, from the Underwriter of the Shares.
Section 12. WAIVER OF TRIAL BY JURY. THE UNDERWRITER AND THE
COMPANY HEREBY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM
OR COUNTERCLAIM (WHETHER BASED IN CONTRACT, TORT OR OTHERWISE) RELATED TO OR
ARISING OUT OF THIS AGREEMENT.
Section 13. Governing Law and Time. This Agreement shall be
governed by the laws of the State of New Jersey. Specified times of the day
refer to New York City time.
Section 14. Counterparts. This Agreement may be executed in
one or more counterparts, and when a counterpart has been executed by each
party, all such counterparts taken together shall constitute one and the same
agreement.
Section 14. Miscellaneous. This Agreement, including all
Exhibits hereto, constitutes the entire understanding of the parties and
supercedes any and all prior negotiations of the parties with respect to this
subject matter. This Agreement may be amended only in writing signed by each of
the parties. In the event that any term, provision or covenant herein or the
application thereof to any circumstances or situation shall be invalid or
unenforceable, in whole or in part, the remainder hereof and the application of
said term, provision or covenant to any other circumstance or situation shall
not be affected thereby, and each term, provision or covenant herein shall be
valid and enforceable to the full extent permitted by law. The failure or delay
by the Underwriter or the Company in exercising any right, power or privilege
hereunder shall not operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any
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other or further exercise thereof or the exercise of any other right, power or
privilege hereunder. If the Public Offering is consummated, the Underwriter may,
at its option and expense, place an announcement in such newspapers and
periodicals as the Underwriter may choose stating that the Underwriter has so
acted, and the capacity in which it has acted.
[The remainder of this page has been left blank intentionally.]
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IN WITNESS WHEREOF, the parties hereto have signed this
Agreement and have declared it effective as of the date written above.
1ST COLONIAL BANCORP
By: _____________________________
Xxxxxx X. Xxxxxxxxx
President and Chief Executive Officer
XXXX XXXX & CO., INC.
By: _____________________________
Xxxxx X. Xxxxx
Managing Director
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EXHIBIT A
PRICE AGREEMENT
[_________], 2004
Xxxx Xxxx & Co., Inc.
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated the date hereof
(the "Underwriting Agreement"), between the Company (as defined in the
Underwriting Agreement) and Xxxx, Xxxx & Co., LLC (the "Underwriter"). The
Underwriting Agreement provides for the purchase by the Underwriter from the
Company of a number of Shares (as such term is defined in the Underwriting
Agreement) of the Company to be determined in the manner set forth in the
Underwriting Agreement and to be set forth herein.
This Agreement is the Price Agreement referred to in the Underwriting
Agreement.
Pursuant to Section 2 of the Underwriting Agreement, the Company agrees
with the Underwriter as follows:
1. The public offering price per Share shall be $[___].
2. The purchase price for the Shares to be paid by the
Underwriter shall be $[_____] per Share.
3. The number of Initial Shares to be purchased by the
Underwriter is [______].
The Company represents and warrants to the Underwriter that the
representations and warranties of the Company set forth in Section 1(a) of the
Underwriting Agreement are accurate as though expressly made at and as of the
date hereof.
This Agreement shall be governed by the laws of the State of New
Jersey.
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If the foregoing is in accordance with the understanding of the
Underwriter of the agreement between the Underwriter and the Company, please
sign and return to the Company a counterpart hereof, whereupon this instrument,
along with all counterparts and together with the Underwriting Agreement, shall
be a binding agreement between the Underwriter and the Company in accordance
with its terms and the terms of the Underwriting Agreement.
Very truly yours,
1ST COLONIAL BANCORP
By: _____________________________
Xxxxxx X. Xxxxxxxxx
President and Chief Executive Officer
Confirmed and accepted as of
the date first above written:
XXXX XXXX & CO., INC
By: __________________________
Name: Xxxxx X. Xxxxx
Title: Managing Director
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EXHIBIT B
LOCK-UP AGREEMENT
Xxxx Xxxx & Co., Inc.
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000-0000
RE: 1st Colonial Bancorp
Ladies & Gentlemen:
The undersigned is an owner of record or beneficially of certain shares
of the common stock, no par value per share ("Common Stock"), of st Colonial
Bancorp (the "Company") or securities convertible into or exchangeable or
exercisable for Common Stock. The Company proposes to carry out a public
offering (the "Offering") of Shares of the Company's Common Stock (the "Shares")
for which you will act as underwriter (the "Underwriter"). The undersigned
recognizes that the Offering will be of benefit to the undersigned and will
benefit the Company by, among other things, raising additional capital for its
operations. The undersigned acknowledges that you are relying on the
representations and agreements of the undersigned contained in this letter in
carrying out the Offering and in entering into underwriting agreements with the
Company with respect to the Offering.
In consideration of the foregoing, the undersigned hereby agrees that
the undersigned will not offer to sell, contract to sell, or otherwise sell,
dispose of, loan, pledge or grant any rights with respect to (collectively, a
"Disposition") any shares of Common Stock, any options or warrants to purchase
any shares of Common Stock or any securities convertible into or exchangeable
for shares of Common Stock (collectively, "Securities") now owned or hereafter
acquired directly by such person or with respect to which such person has or
hereafter acquires the power of disposition, except for (i) any bona fide gift
or gifts of the Securities, provided the donee or donees thereof agree in
writing to be bound by this restriction, (ii) grants of employee stock options
pursuant to the terms of a plan in effect on the date hereof, issuances of
Common Stock pursuant to the exercise of such options or the exercise of any
other employee stock options outstanding on the date hereof, or (iii) with the
prior written consent of the Underwriter, for a period commencing on the date
hereof and continuing to a date 180 days after the Offering has been closed (the
"Lock-up Period"). The foregoing restriction has been expressly agreed to
preclude the holder of the Securities from engaging in any hedging or other
transaction which is designed to or reasonably expected to lead to or result in
a Disposition of Securities during the Lock-up Period, even if such Securities
would be disposed of by someone other than such holder. Such prohibited hedging
or other transactions would include, without limitation, any short sale (whether
or not against the box) or any purchase, sale or grant of any right (including,
without limitation, any put or call option) with respect to any Securities or
with respect to any security (other than a broad-based market basket or index)
that included, relates to or derives any significant part of its value from
Securities. The undersigned also agrees and consents to the entry of stop
transfer instructions with the Company's transfer agent and registrar against
the
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transfer of shares of Common Stock or Securities held by the undersigned during
the Lockup Period, except in compliance with the foregoing restrictions.
This agreement is irrevocable and will be binding on the undersigned
and the respective successors, heirs, personal representatives, and assigns of
the undersigned. This letter agreement shall terminate and be no further force
and effect upon a decision by the Underwriter or the Company not to proceed with
the Offering.
Dated: ___________________________
____________________________________
[Printed Name of Holder]
By: ________________________________
[Signature]
____________________________________
Printed Name of Person Signing
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EXHIBIT C
COMPANY COUNSEL'S OPINION
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